The firm Exeter Water provides water to households in Exeter. It does not have any competitors and maximises its profit. Demand for water is given by D(p) = 100 - 2p. Exeter water has a fixed cost of 500 and a marginal cost of 4. a. Calculate what quantity the firm will produce and what price it will charge. b. How much profit will Exeter Water make? c. What is the total consumer surplus? d. Exeter city council wants to reduce households' water bills. One councillor suggests introducing a price cap on water bills and another suggests allowing competing firms to enter the market. Which of these two suggestions would you recommend they follow? Explain why.